Iconic Mail & Guardian ship flounders
Johannesburg - The Mail & Guardian, one of South Africa’s most iconic newspapers, is facing a cash crunch so severe that suppliers and contributors, as well as some permanent staff, have not been paid for months on end. The company also faces a potential strike over bonuses and other incentives.
The Star understands at least two staffers are taking legal counsel and legal action could be imminent over unpaid bonuses.
Sources said the newspaper had also been threatened with eviction by property firm Growthpoint, owners of the plush Rosebank offices from which the M&G operates.
Chief executive Hoosain Karjieker confirmed to The Star on Thursday night that the company had been experiencing periodic financial difficulties, but would not be drawn on the details. He said the company’s cash flow crisis was “not beyond the normal”.
“We’ve had instances where government departments and ad agencies don’t pay on time, but nothing out of the norm and nothing of significance,” he said.
Asked about Growthpoint, Karjieker initially denied that the newspaper had ever defaulted on its rent, but later phoned The Star after speaking to the M&G’s portfolio manager at the property group.
“I can just reaffirm are our rentals are up to date. There may have been instances of dispute on the rental in the past but these have all been resolved. There was no eviction order,” Karjieker said.
Karjieker was at pains on Thursday night to downplay the financial crisis facing the paper. However, other sources painted a bleaker picture. Freelancers, current and ex-employees, and suppliers spoke of not being paid on time or not at all.
There was also talk of unpaid printers and distributors, and demoralised sales staff whose commissions were not forthcoming, sometimes for months.
At least one high-profile freelance journalist, who participated in one of the paper’s successful and financially lucrative Critical Thinking forums, waited six months for payment of R10 000.
“Freelancers need to submit a lot of information before we can process payments,” Karjieker said.
This could take “a few days” but not “more than a week, two weeks or so”.
If it took more than this then the company’s “own internal processes let us down”.
“I’ve asked people to contact me directly where mistakes are made,” he said.
Sources inside the paper said the ongoing crisis was the result of owner Trevor Ncube’s loss-making Zimbabwean operations.
Ncube’s Alpha Media Holdings operates four newspapers in Zimbabwe, none of which are financially healthy.
“We paid the salaries of journalists at The Standard,” one disgruntled former staffer said.
This arrangement has put the squeeze on the more financially successful local operation and, according to the former staffer, delayed or halted much needed reinvestment into the South African business.
The sources said Ncube was reluctant to let go of AMH or any of its newspapers “for political reasons”.
A large presence of independent papers places him in a position to influence the transition in that country, they said. That means the Zimbabwean assets had to be kept afloat regardless at the expense of the Mail & Guardian.
Karjieker denied the M&G was being used to subsidise Ncube’s Zimbabwean business interests.